The case was the U.S. Supreme Court ruling in Sorrell v. IMS Health Inc., 2011 WL 2472796 (U.S. 2011). The Court dealt with a conflict between a Vermont statute restricting disclosure or sale of data for commercial purposes and the First Amendment. The anti-sale and disclosure rules lost. The Vermont statute that precluded the sale, disclosure, and use of pharmacy records identifying doctors and what drugs they were prescribing for patients to data mining companies who would organize and resell it to “detailers” (pharmaceutical sales persons) to tailor their marketing to doctors.

The Court held that data and its sale, distribution and use was speech protected by the First Amendment and that “[s]peech in aid of marketing… is a form of expression protected by the Free Speech Clause of the First Amendment.” This decision is especially important with respect to the frenzy to impose restrictions on persons or businesses who have obtained the data. The state had tried to argue that regulating data was akin to regulating a commodity, but of course, it is not. First Amendment limits apply to those regulations.

The Court commented: “Vermont has imposed a restriction on access to information in private hands. … Here [we have] “a case in which the government is prohibiting a speaker from conveying information that the speaker already possesses.” … An individual's right to speak is implicated when information he or she possesses is subjected to “restraints on the way in which the information might be used” or disseminated.

Furthermore, the statute focused on content and particular speakers (and not others) and, thus, was subject to strict scrutiny. Even if it were not viewed under strict scrutiny, it would still be invalid under a First Amendment analysis requiring that content regulation serve a substantial purpose and be narrowly tailored to achieve that purpose with minimal burden on speech.

Vermont had argued that selling the data was not speech, but merely selling a commodity or, in the alternative, that the statute regulated conduct, rather than speech, since it precluded sale or licensing. The six-justice majority rejected both arguments.

This Court has held that the creation and dissemination of information are speech within the meaning of the First Amendment. Facts, after all, are the beginning point for much of the speech that is most essential to advance human knowledge and to conduct human affairs. There is thus a strong argument that prescriber-identifying information is speech for First Amendment purposes.

The Court agreed the First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech, but this law imposed more than an incidental burden on protected expression and when that is the case, it doesn’t matter that the speech is commercial. To sustain the law, Vermont had to show at least that the statute directly advanced a substantial governmental interest and was drawn to achieve that interest. It failed to do so. Vermont argued that its law was (1) necessary to protect medical privacy, including physician confidentiality, avoidance of harassment of doctors by salespersons, and the integrity of the doctor-patient relationship, and (2) integral to the achieving the policy objectives of improved public health and reduced healthcare costs. The Court rejected both justifications.

As to the first, there was no confidentiality interest advanced because the law allowed too many people (other than pharmaceutical industry participants) to disclose the information. The Court also rejected the state’s justification that it was shielding doctors from harassment. Quoting Supreme Court precedent, the court said: “Personal privacy even in one's own home receives ‘ample protection’ from the ‘resident's unquestioned right to refuse to engage in conversation with unwelcome visitors’ …. A physician's office is no more private and is entitled to no greater protection.” Similarly, the Court did not accept Vermont’s argument that it was advancing the doctor-patient relationship: “The more benign and, many would say, beneficial speech of pharmaceutical marketing is also entitled to the protection of the First Amendment. If pharmaceutical marketing affects treatment decisions, it does so because doctors find it persuasive. Absent circumstances far from those presented here, the fear that speech might persuade provides no lawful basis for quieting it.”

As to the second, the Court did not accept that the state’s policy objective was any reason to burden opposing speech:

Vermont may be displeased that detailers who use prescriber-identifying information are effective in promoting brand-name drugs. The State can express that view through its own speech. … But a State's failure to persuade does not allow it to hamstring the opposition. The State may not burden the speech of others in order to tilt public debate in a preferred direction. “The commercial marketplace, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented.”

The Court’s recognition that the ability to use, sell or disclose data rightfully acquired is an element of speech is significant in modern law, since it places a limits on how far and in what manner purported interests in data protection and “privacy” can intrude. How those limits will evolve remains to be seen, of course, but the Sorrell decision leaves no doubt that they are present.